Talking about the perspective future of paytm and BCCI deal

Paytm, the slowly becoming popular Indian e-commerce website, grabbed the sponsorship rights for India’s home cricketing season from 2015-19 in a deal worth INR 203 crore with the BCCI.

Although the deal seems to be a favorable one for the BCCI as it saw an increase of INR 40 Lakhs from its previous deal with Micromax, looking at the facts such as the growing concern about the IPL’s brand image and the fact that the BCCI earns a large amount of revenue from the IPL, and the rise of other sporting leagues in India casts a shadow on whether the deal with the BCCI will prove as profitable for Paytm as it aspires to.

Lessons from the past

If we go by the recent past, then the last few associations of the BCCI, when it comes to sponsorship of home seasons, past deals have not been very successful ventures. After Sahara backed out of their deal in 2010, the telecom giant Bharti Airtel grabbed the opportunity by striking a deal of INR 3.3 crore per match for a period of 3 years.

Even after being offered a negotiation period of 3 months at the end of the deal, it showed no interest in extending the contract owing to reasons such as the poor image of the board after the IPL scandal which was a huge setback for BCCI’s credibility.

From then on BCCI has tied up with Micromax and Star India both for a one year period each.

Price per match over the years

One can figure out from the table above that the price per match has nosedived in the past few years, registering a decline of about 34% from the 2010 deal with Bharti Airtel to the 2014 deal with Micromax. This suggests that the market for cricket in India may not be the same anymore, which may be attributed to various factors such as lack of quality cricket, start of leagues based on the lines of IPL for other sports.

The current deal with Paytm is an increase of more than 9% from the previous season, but because of the controversies surrounding the board due to the IPL verdict, the market may be in a similar state to that of 2012-13 when fixing in IPL was first spotted – as mentioned earlier it was one of the factors for Airtel not willing to extend its contract with the board.

Looking ahead

If we look ahead to the coming four years of cricket in India, Paytm will be the title sponsor for 80 international matches featuring the Indian Cricket team and out of those 14 games will feature one out of West Indies, Bangladesh or Zimbabwe (5 test matches, 5ODIs and 1 T-20).

Australia will be a regular feature in India’s fixtures during this period, as India is scheduled to play 18 ODIs, 10 Test matches, 5 T20Is against them, which can work both ways i.e. if the quality of cricket at display is of really high standards then it can fetch good amount of interest from the fans or else it can also be a cause of boredom for them too.

(Source: ICC Future Tour Program)

The other factor that can really affect the money that the game attracts is the growing market for other sports in India.

(Value of team sponsorship in INR crores)

As can be seen from the table, the value of team sponsorship fell about 10.6% for cricket 2013 to 2014 and that for football and other sporting leagues in the nation grew by 227% and 1074% during the same period.

Ground sponsorship, which is the money paid by the central sponsor in any sport to the organizers, also fell from INR 508.3 crores to 464.70 crores, in a gap of one year.

Annual Sports viewership in India

Cricket, over the last couple of years, has also lost a big chunk of the total of annual sports viewership in India. In 2012 it formed nearly 21.10% of the total viewership but that has dipped by nearly 3% to 17.80 in 2014.

These statistics clearly indicate that although cricket is still pretty much at the centre of the Indian sports industry, other options are also beginning to show their presence in the market. The rise of Indian Super League, Pro Kabaddi League and Hockey League has shown that the market dynamics have begun to change and the future of the industry might be a little different from its present state.

All the above factors indicate that market for cricket in India may not be the same as it was five years back but with big events like the ICC World T-20 in 2016, which would be hosted by India and the Champions Trophy in 2019 to come, an Indian win might just give it the much required push and would hopefully help to keep Paytm afloat in the troubled waters of the cricketing world.